Читать книгу The Real Trump Deal - Martin E. Latz - Страница 13

CHAPTER 4

TARGETING TRUE MOTIVATIONS: USING CARROTS TO CLOSE DEALS

“It felt good seeing my name in print [when the newspaper headline “Trump Wins Game for NYMA” appeared regarding his high school baseball game]. How many people are in print? Nobody’s in print. It was the first time I was ever in the newspaper. I thought it was amazing.” ¹³⁴

—Donald J. Trump

Donald Trump has enjoyed a long-standing love affair with the media (until quite recently). He admittedly loves to see his name and face in print and on television. For years he adorned his office with cover pages of magazines featuring him.¹³⁵

And for years, the media have been very good to him and his brand. He’s also been very good to the media. Stories on Trump sell and sell well. Just look to the success of The Apprentice.

In fact, his relationship with the media—perhaps the most critical and long-standing “negotiation” in his career—garnered him so much free press during the campaign that it likely played a significant role in his winning the presidency.

How has he developed such a profitable and successful media relationship?

Trump deeply understands the media’s true needs and interests. He knows what they want and, crucially, why they want it. Knowing this, he offers them carrots that satisfy their interests.

This Trump strategy was used on reporter Wayne Barrett in 1978, as described in Trump Revealed.

Barrett, one of the first reporters to take a deep look at Trump’s deals, was about to become one of the first to experience a media strategy, then in its infancy, that would become familiar to reporters around New York, then across the country…. Trump handled him with carrot and stick—attempts to ingratiate himself with the reporter, followed almost immediately with thinly veiled threats.

First, the carrot. Barrett lived in Brownsville, then one of the poorest areas of Brooklyn. “I could get you an apartment,” Trump told Barrett. “That must be an awfully tough neighborhood.” Barrett replied that he chose to live in Brownsville and worked as a community organizer. “We do the same thing!” Trump replied. “We’re both rebuilding neighborhoods…. We’re going to have to really get to know each other.”

Then, the stick. “I’ve broken one writer,” Trump told Barrett another time. “You and I’ve been friends and all, but if your story damages my reputation, I want you to know I’ll sue.”¹³⁶

Three elements make up the carrot part of Trump’s carrot-and-stick negotiation strategy:

 identify his own personal and professional interests,

 ascertain reporters’ personal and professional interests, and

 explore what options (carrots) can satisfy them both. Trump used this same approach in his business negotiations.

After offering up these carrots, we will then evaluate how his approach aligns with the experts’ recommendations.

Identify His Own Personal and Professional Interests

Trump knows what he wants and why he wants it in his media “negotiations.” These include personal and professional wants and needs. These merge for his personal and business brand.

Why do we care? Because his interests drive him personally and business-wise and form critical components in all his negotiations. Here is what he generally wants from the media.

Professional/personal positions—what he wants.

– Press mentions of his name and brand—the more distribution and prominent, the better

– Positive press aligned with his brand and message

– Any press, even somewhat negative press is better than no press to Trump

Trump described what he wanted media-wise in his bestseller The Art of the Deal,

I’m not saying that [journalists] necessarily like me. Sometimes they write positively, and sometimes they write negatively. But from a pure business point of view, the benefits of being written about have far outweighed the drawbacks. It’s really quite simple. If I take a full-page ad in The New York Times to publicize a project, it might cost $40,000, and in any case, people tend to be skeptical about advertising. But if The New York Times writes even a moderately positive one-column story about one of my deals, it doesn’t cost me anything, and it’s worth a lot more than $40,000.

The funny thing is that even a critical story, which may be hurtful personally, can be very valuable to your business. Television City is a perfect example. When I bought the land in 1985, many people, even those on the West Side, didn’t realize that those one hundred acres existed. Then I announced I was going to build the world’s tallest building on the site. Instantly, it became a media event: The New York Times put it on the front page, Dan Rather announced it on the evening news, and George Will wrote a column about it in Newsweek. Every architecture critic had an opinion, and so did a lot of editorial writers. Not all of them liked the idea of the world’s tallest building. But the point is that we got a lot of attention, and that alone creates value.¹³⁷

Why does Trump want this? It’s not just about the money.

Personal/professional interests—why he wants this.

– Ego satisfaction, recognition, and treatment as a celebrity

– Reputational interest as a “winner” and not a “loser”

– Reputational interest as a hugely successful businessman

– Reputational interest as a master dealmaker/negotiator

– Reputational interest as a top international real-estate developer

– Customer and potential customer perception of brand and of Trump (the person)

– Perception of financial and monetary success

– Actual financial and monetary success

– Sufficient financial success to enjoy the trappings of the uberwealthy

Trump’s editor Peter Osnos at Random House, publisher of The Art of the Deal, worked closely with Trump on the book and its marketing. He insightfully noted Trump’s core interests in these comments about their book marketing campaign:

It was all about being high-visibility. Trump had this urge to be a really big name, so he cultivated celebrity. But his lifestyle was surprisingly unglamorous. He’s quite disciplined in some ways. Doesn’t smoke, doesn’t drink, lives above the store. He was not a big New York socialite, never was. He basically enjoyed going upstairs and watching the tube. What he was interested in was celebrity and his businesses—construction, real estate, gambling, wrestling, boxing.¹³⁸

Priority-wise, the celebrity/reputational interest appeared to matter even more than his interest in substantive success. Jeffrey Breslow invented a Monopoly-like board game called Trump: The Game in 1988. Here was his pitch to Trump:

Breslow was prepared to get down on the floor and pit his strategic wiles against the guy whose picture would be on the box…. But Trump had no interest in playing or even hearing details of the game. He took a quick glance at the mock-up of the box’s cover and said, “I like it—what’s next?”

What came next was a lightning-fast negotiation, a promotional blitz, and the sale of about a million units.¹³⁹

Reporters also recognized his interest in celebrity. Former New York magazine writer John Taylor covered Trump in New York and said of him:

He was literally addicted to publicity and recognition. He would get this, like, dopamine surge in his brain. I would walk with him into some building or room, and Trump would kind of hang back and watch the room, and wait until the room had filled, and he would have that moment of recognition, when you’d see waves of people turn and realize it was him…. He would live for those moments.¹⁴⁰

Trump himself recognized this, as his morning routine for decades included a review of press clippings about him from the previous day.¹⁴¹

A quick note on this celebrity, ego-related interest. Many celebrities and famous individuals crave attention. This draws them to these careers. Other similarly famous individuals shun the attention and view the celebrity as a curse. They get personal satisfaction in other ways. Some love and hate it.

The point here is not to judge this interest as good or bad. Instead, it is to highlight an important Trump interest that drives much of his negotiation behavior.

Ascertain Reporters’ Personal and Professional Interests

So, knowing his interests, Trump’s next step relates to the reporters’ personal and professional interests. Trump learned these early in his career. As he wrote:

One thing I’ve learned about the press is that they’re always hungry for a good story, and the more sensational the better. It’s in the nature of the job, and I understand that. The point is that if you are a little different, or a little outrageous, or if you do things that are bold or controversial, the press is going to write about you. I’ve always done things a little differently, I don’t mind controversy, and my deals tend to be somewhat ambitious. Also, I achieved a lot when I was very young, and I chose to live in a certain style. The result is that the press has always wanted to write about me.

Most reporters, I find, have very little interest in exploring the substance of a detailed proposal for a development. They look instead for the sensational angle.¹⁴²

Trump also knew that reporters worked on deadlines and had a huge interest in timeliness and responsiveness.

Trump also understood perhaps the most fundamental media interest of all in an increasingly for-profit media world—readership and revenue. Anything that sells papers, increases readership, or bumps up viewers satisfies this interest.

In Trump’s early New York media world, dominated by tabloids and gossip columnists, this interest prevailed.

Of course, many in the media would add truth, accuracy, and unbiased reporting as crucial interests, especially on the hard news and investigative reporting side. But Trump never seemed to recognize this as important to the media. After all, they appeared to cover everything he said and did regardless of its truth and accuracy.

As Barbara Res, Trump’s longtime employee, said:

Donald had a way of getting into print whatever he would say, even if it weren’t necessarily the whole and honest truth…. He managed to say what he would say, and people would write it and then it would be the truth. That was the thing with him that they call the big lie. You say something enough times, it becomes the truth. And he is the master of that.¹⁴³

So, what does Trump do—knowing his and his counterparts’ personal and professional interests? Offers carrots that satisfy their common interests.

Explore Ways to Satisfy Common Interests (The Carrots)

Trump has offered reporters many carrots over the years. And he does it in an extremely timely fashion, understanding their interest in responsiveness. As noted in Trump Revealed, “While other developers might refuse interviews or issue carefully worded statements through publicists, Trump was almost never unavailable to talk for a few minutes or a few hours…. Trump [also] usually returned calls personally, within hours if not minutes.”¹⁴⁴

What carrots did Trump give reporters (other than offering to get Barrett an apartment in a nicer part of New York)? “Sensational” and “bold” and “controversial” quotes and stories and access about his business and personal life. Everything “Trump” was newsworthy, and he knew and promoted this.

Even his divorces became tabloid fodder, which Trump managed. He himself said, “[a] divorce is never a pleasant thing, but from a business standpoint, it’s had a very positive effect.” ¹⁴⁵ And business occupied the central part of his life.

Trump employed these same strategies in his business negotiations. First, he understood his personal and business needs and interests. Second, he ascertained his counterparts’ personal and business needs and interests. And finally, he found ways to satisfy their common interests and offered carrots.

Two business negotiations illustrate this: the Commodore Hotel Redevelopment and Trump Tower.

The Commodore Hotel Redevelopment

Trump needed a first project in Manhattan to demonstrate his development abilities, prove his financial acumen independent of his dad, and establish himself in a highly competitive real-estate environment (collectively, his interests). To do this, he picked the redevelopment of the run-down Commodore Hotel next to Grand Central Station.

What did he need to get this done?

– Control the Commodore site.

– Obtain a tax abatement from New York City so the redeveloped hotel could cover its mortgage and be profitable.

– Receive a loan of about $70 million from financial institutions for the redevelopment.

– Find a hotel operator to run it after redevelopment.

His counterparts? The Penn Central railways bankruptcy trustee (the landowner). New York City. Financial institutions. And Hyatt Hotels, which then had no New York City hotel.

Trump did four things in this negotiation that would tap into his counterparts’ personal and business interests. These became hallmarks of his negotiation approach.

1. Trump’s Carrots to Get the Site—Political Connections and Partner Relationships

Trump knew Penn Central needed a hard-driven, hungry, financially solid developer with access to capital and political clout at city hall to take on this risky redevelopment project.

So, he initially spent time with the Penn Central representative showing him various large Fred Trump-developed properties. This was meant to satisfy Penn Central’s fundamental interest in a proven developer with the experience and expertise to reliably get the job done.¹⁴⁶

Trump even sent the Penn Central representative a television set as a Christmas present, appealing to the representative’s personal self-interest. The Penn Central rep returned it.¹⁴⁷

To satisfy Penn Central’s interest in a politically connected developer (a likely requirement to get a big tax break and other zoning benefits), Trump arranged a meeting with New York City’s newly elected Mayor Abe Beame. Beame was a longtime friend of Fred Trump’s and a candidate to whom the Trumps had made significant financial contributions.

At that meeting, organized within a day—illustrating Fred Trump’s political clout—Beame put his arms around both Trumps and said to the Penn Central representative, “Whatever Donald and Fred want, they have my complete backing.”¹⁴⁸

Donald Trump appreciated the political interests involved and how to satisfy them. In fact, many would view politicians’ primary interest as getting re-elected. How could Trump satisfy their interests? Financial contributions. Trump told his Penn Central counterpart, according to Trump Show:

As they walked down Lexington Avenue together, Trump saw a newspaper headline announcing the arrest of a New Jersey mayor for allegedly taking an $800,000 bribe from a developer. “There’s no goddamn mayor in America worth $800,000,” Trump bellowed. “I can buy a U.S. Senator for $200,000.”¹⁴⁹

But Trump ran into problems getting Penn Central to sell him the option rights to the site, as the bankruptcy judge needed to approve the deal. The court could only accept an offer that satisfied what it perceived to be in Penn Central’s best financial interest.

And a competing offer came in from a developer named Starrett that was “a lot higher than mine,” according to Trump.¹⁵⁰

At the same time, though, Starrett was partnering with Fred Trump in developing Starrett City, a large government-subsidized 5,000-unit residential construction project.

Upon hearing of Starrett’s bid for the Commodore site, Trump met with Starrett’s chairman Robert Olnick. As Trump later testified about this meeting: “Starrett and Trump are partners in Starrett City, of which we own 25 percent and they own 5 percent. Frankly, if we hadn’t put in the $7 million equity, the project wouldn’t have been built. We have a big relationship with Starrett.”

Starrett abruptly withdrew its offer after meeting with Trump, before the court could even evaluate its competing bid.¹⁵¹

Trump appreciated Starrett’s more important interests here—continuing its “big relationship” with the Trumps.

2. Trump’s Carrot for a Competing Bidder—Join His Lawsuit

The second counterpart interest Trump understood involved a second competing bid supported by Penn Central’s shareholders. Here’s how Trump’s strategy addressing this challenge unfolded, according to Trump Revealed.

Trump was a construction neophyte, but he was already adept at turning around the opposition. David Berger, a lawyer who represented the railroad’s shareholders, initially opposed selling Trump the Commodore, but at a crucial moment in the negotiations, Berger flipped to support a deal with Trump.

A few years later, federal prosecutors investigated whether Berger’s sudden change of heart was connected to Trump’s decision to help Berger out and join his unrelated, $100 million suit by New York landlords against nine major oil companies for fixing the price of heating oil. The federal probe ended without any indictments. Both Trump and Berger denied there was any quid pro quo.¹⁵²

But Trump joining Berger’s lawsuit brought a significant financial benefit to Berger. While Berger’s switch adversely impacted the interests of Berger’s Penn Central shareholder clients, it more fully satisfied Berger’s personal self-interest financially. Trump almost certainly knew this, as described in Trump Show.

Berger had a powerful financial stake in Trump’s signing on for the lawsuit: His firm would get a third of any settlement, and the size of the award would be determined by the number of apartment units owned by landlords who became plaintiffs…. When Trump ultimately became a plaintiff, he brought more apartments into the case than any of the other eight plaintiff groups….

[This became] a pattern of Donald’s business life before and since: The repeated wooing or retention of critical public or legal opponents would become a lifelong hallmark of the Trump style. [Emphasis added.]¹⁵³

Trump focused on Berger’s personal financial self-interest—and likely offered up a powerful carrot that satisfied this interest.

3. Trump’s Carrot for the Critical City Official—a Great New Job

The third major carrot illustrating Trump’s strategy? To get the Commodore deal done, Trump needed to navigate multiple city bureaucracies and satisfy their interests and the city’s overall interest in redeveloping a rundown section of the city. How did he accomplish this seemingly herculean task for a young developer in his first Manhattan project?

Enter Deputy New York City Mayor Stanley Friedman. Friedman ended up with an extremely powerful personal self-interest in getting this deal done, according to Trump Show.

The inducement was the job Roy Cohn [Trump’s lawyer] had already promised him. Friedman was even to get Roy’s fifth-floor office in Cohn’s townhouse, complete with cathedral ceiling, bar, outdoor patio, a greenhouse where Friedman’s secretary would work, and an adjoining apartment with kitchen, living room, fireplace, and loft bedroom. Friedman was guaranteed a six-figure salary for the first time in his life and, unless he stumbled, the rest of it.¹⁵⁴

Friedman got the city’s bureaucracies on board for Trump and Cohn. They reciprocated. “One of Friedman’s best paying clients over the years was Donald Trump,” according to Trump Show.¹⁵⁵

4. Trump’s Carrot for the Banks—His Dad’s Personal Guarantee

The final counterpart interest that proved crucial to many future Trump negotiations involved the banks’ security interest for their $70 million construction loan. Since Donald Trump himself had little financial creditworthiness at this time, his father Fred and Hyatt Hotels jointly guaranteed the loan.

Hyatt negotiated in return a promotion to jointly own the hotel and not just operate it. “[Trump] could not have made it happen without Fred’s—and Hyatt’s signatures. Hyatt chairman Jay Pritzker said later that Donald simply ‘couldn’t get the financing’ and ‘we were able to help.’”¹⁵⁶

Trump knew the banks would never loan him $70 million based solely on his personal qualities and the project’s strength. Their financial interest would not allow it. But Trump’s carrot was his ace in the hole—Dad’s guarantee.

He would use this carrot and later his trust fund to satisfy his counterpart’s interests several more times in future negotiations.

Trump Tower

Donald Trump needed to build Trump Tower fast. Delays would be disastrous. The main reason he needed to move fast related to the concrete for its construction. The other reason? Time is money in development. The sooner you complete the build, the sooner revenue starts flowing.

The “concrete” problem for New York developers at the time? John Cody, who ran the union controlling the cement truckers and who would be called “the most significant labor racketeer preying on the construction industry in New York” in 1989 by documents cited by the U.S. House Subcommittee on Criminal Justice.¹⁵⁷

Trump himself would call Cody—after Cody died in 2001—“one psychopathic crazy bastard” and “real scum.”¹⁵⁸

Trump’s interest? Timing. Get Trump Tower built fast with no construction delays.

Cody’s interest? He wanted a Trump Tower luxury apartment for his girlfriend Verina Hixon.

Trump got his concrete on time with no delays. “In 1982, when union strikes froze developments across the city, construction at Trump Tower didn’t miss a beat.”¹⁵⁹

And Cody got his girlfriend three large duplexes on two Trump Tower floors, just under Trump’s penthouse, including Trump Tower’s only indoor swimming pool. She wanted upgrades, too. “When Trump resisted one of Hixon’s [many upgrade] requests, she called Cody, and construction deliveries to the building stopped until work at her apartment resumed,” according to Hixon’s sworn testimony in a related case.¹⁶⁰

While Trump denied this under oath, having been subpoenaed about it by federal investigators in 1982, Cody said he “knew Trump quite well” and “Donald liked to deal with me through Roy Cohn.”¹⁶¹

Barbara Res, who oversaw the Trump Tower construction, confirmed that “Donald and his wife Ivana were very friendly with a woman whom everyone associated with the project understood to be Cody’s girlfriend.”¹⁶²

Pulitzer Prize–winning author David Cay Johnston in The Making of Donald Trump (Making Trump) also confirmed much of this, stating:

Cody’s son, Michael, told me that his father was both a loving dad and every bit the notorious racketeer people believed him to be. He said that, as a boy, he listened in when Trump called his father, imploring Cody to make sure concrete flowed steadily at Trump Tower so he would not go broke before it was finished….

[And] John Cody invested $100,000 in [Hixon’s] apartments and stayed there often. Trump helped the woman get a $3 million mortgage to pay for the three apartments…. She said she got the mortgage from a bank that Trump recommended she use, without filling out a loan application or showing financials.¹⁶³

Much of this information came to light when Trump sued Hixon for $250,000 in unpaid upgrades. She sued him back for $20 million, accusing Trump of “taking kickbacks from contractors.” Trump paid Hixon $500,000 to settle.¹⁶⁴

Trump understood his own and Cody’s interests. And he appeared to satisfy both.

Trump’s Understanding of Interests Aligns with the Research

Finding out what the parties want and need and offering up carrots satisfying them represent a tried and true method for getting what you want in negotiations.

RESEARCH: Focusing on the parties’ fundamental interests, not just their positions, has been consistently taught by negotiation professors ever since Roger Fisher and William Ury first made this interests/positions distinction in Getting to Yes (later revised with Bruce Patton as co-author).¹⁶⁵

What should all negotiators do? Uncover fundamental interests underlying positions. Interests, according to Fisher, Ury, and Patton, are parties’ needs, desires, concerns, and fears. They’re the fundamental driving forces that motivate parties. For some it’s ego. They want everyone to know they “won.” For others it may be security or economic well-being. Still others crave recognition, a sense of belonging, or control over one’s life. The number and type of interests at issue in negotiations are many and varied.

Positions, by contrast, are what each side believes will satisfy their interests. Positions are what you want. Interests are why you want it.¹⁶⁶

Why do you care? Fundamental interests determine success or failure. Negotiation success or failure is directly tied to the extent that the parties involved satisfy their true interests. If you haven’t fully explored your interests, you can’t really know whether you have succeeded or failed.¹⁶⁷

On the Commodore and Trump Tower deals, Trump knew his interests, ascertained his counterparts’ interests, and found ways to satisfy them. Trump in his later deals, however, stopped doing his due diligence. This later proved fatal to satisfying his and his counterparts’ fundamental interests.

Uncovering interests takes time and effort.

Bribery and Conflicts of Interests

One final note on interests. Parties cannot simply negotiate based on satisfying mutual interests. Bribery, conflict of interest, and other laws prevent this. Society has determined fairness requires that business deals largely revolve around business interests—not the personal self-interests of those involved in negotiations.

You can’t personally pay Employee A of Business ABC to award you a big contract with Business ABC. Nor can you pay Politician A of State A to pass legislation favorable to you or zone some property that financially benefits you. These represent illegal acts.

The key in these types of criminal matters relates to whether a quid pro quo exists. You do this because I paid you this. If payment A does not cause or is not related to the deal or a benefit, no problem. The timing, then, was just a coincidence.

Trump has been investigated several times by federal authorities regarding whether he has crossed the line into criminal behavior. At no time has he been indicted or prosecuted. And he has consistently denied being involved in any criminal behavior.

He has, however, said “I’ll do nearly anything within legal bounds to win.”¹⁶⁸ Keep in mind: Just because he hasn’t been indicted, prosecuted, nor convicted doesn’t mean he didn’t do it.

It just means the prosecutors decided they didn’t then have sufficient evidence to prove “beyond a reasonable doubt” that he engaged in the criminal conduct.

LESSONS LEARNED

Trump’s Strategies and Tactics	Trump understands and seeks to fulfill his personal and professional interests in negotiations.
Trump’s greatest interest is in the perception of “winning.”
Trump ascertains his counterparts’ personal and professional interests.
Trump explores ways to satisfy his counterparts’ personal interests, the carrots.
Trump deeply understands media and political interests.
Lessons Learned	Uncovering parties’ true personal and professional interests and needs—not just positions—represents a crucial negotiation strategy.
Satisfying parties’ fundamental interests determines success or failure.
Exploring underlying interests takes time and effort.
Bribery and other legal restrictions prevent negotiations from solely revolving around interests.